Oil Industry Power Is Slithering Away

With oil prices remaining low, hopes of combating climate change through emissions reduction are improving as the oil industry shrinks.

Big oil is getting smaller.  Many of the oil services companies that are employed when new fields are being developed have been laying off workers, and oil companies have been writing down their assets.

The problem is the persistent low price of oil.  Despite the best efforts of OPEC − the organisation representing the developing world’s oil producing countries − to limit production and put a squeeze on supplies, oil prices have risen only slightly.

This has put many potential fields in the category of being too expensive to exploit − particularly in the case of the tar sands of Canada, and in the Arctic and difficult-to-reach offshore locations.

One of the areas where small fluctuations in the price of oil make a big difference is in the expansion of the fracking industry in North America, which led to the glut of oil on the world market.

Oil industry majors
The US, once the world’s biggest importer of oil, has increased home production so much that it now provides more than 75% of its own oil.  This has left OPEC countries looking for new customers.

The world’s oil field services companies, which rely on the oil industry majors such as Exxon, BP, and Shell to employ them in exploiting new fields, have been shrinking as a result.

According to research by oil and gas consulting service Rystad Energy, about 300,000 people in the sector have lost their jobs between 2014-16.  That is about 35% of the total workforce of the world’s top 50 oilfield services companies.

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